How are solar power providers regulated? Figuring that out is no simple task. Variations abound in everything from local permit fees to the legality of taxes on solar power produced or limitations on the producers. This big can of worms is spilling over into the Southwest and taking on a larger scale that could set a precedent for other regions.

Photo Credit: ItzaFineDay

In Arizona, they have the question of third-party companies that own solar power systems and sell that power to utilities via power purchase agreements. The question, which originates at Arizona State University in Tempe, is how these agreements and their providers should be regulated. The Arizona Corporation Commission is currently deliberating on how to best go about that.

The problem holding up solar projects at the moment is a lack of clearly defined rules, which leaves projects mired in lengthy legal debates. The million dollar question is whether adopted rules would speed up solar adoption in Arizona or create a complex and unwieldy system that would discourage future solar installations.

Not so far to the north, in southern Colorado, a similar issue is causing trouble, this time regarding land-use regulations for solar companies in the San Luis Valley. The issue here seems more about devising a nationwide (as opposed to city-wide) method of regulation to prevent confusion, delays, and even local animosity about large solar power plants that will probably cross set borders within the county.

Both of these examples represent a larger issue facing the solar industry and government. Should we have broad, uniform solar power regulation or continue to let cities and counties devise their own plans? Many in the solar industry feel that federal regulation is best because it would set a clear line for solar development and depending on the stringency of regulation, fast-track solar projects nationwide. On the other hand, any universal regulation would no doubt irk many local counties and communities.

The answer to regulation of solar power providers, as well as utilities and others in the solar industry, is one that must soon be answered. Solar companies may be pushing for an answer soon because the general attitude toward solar power at the regulatory level is so favorable at the moment… that, and the fact that many solar projects are currently drowning in debate and permitting.

Either way, the answer must come as solar power and renewable energy as a whole continue to broaden their influence on today’s electric grid and electricity consumer. Past deregulation of the national grid has arguably led to the transmission troubles for present solar projects. Current regulation of the solar energy industry may be a complex and drawn-out debate, but nevertheless a necessary one for creating a fair and healthy industry. The can of worms is now open… fish on.

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Posted on September 3rd in Solar Politics by Dan.